US Government Announces Historic Nuclear Energy Deal

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The Significance of the Contract

The General Services Administration (GSA), which oversees government buildings, has recently announced a substantial nuclear energy contract. This development comes on the heels of major tech companies making significant nuclear energy deals last year.

Key Details of the Contract

The 10-year, $840 million contract is for 10 million megawatt-hours of electricity.
According to Constellation spokesperson Paul Adams, this amount is equivalent to what’s needed for more than 1 million homes annually.
Nuclear energy makes up a significant portion of the GSA deal, about 4 million megawatt-hours.

The Growing Importance of Nuclear Energy

Silicon Valley is increasingly turning to nuclear energy to satiate electricity demand from AI data centers. The federal government is the nation’s single largest energy consumer, making this contract a big boon to the nuclear industry.

Quotes from Key Figures

"This agreement is another powerful example of how things have changed," said Joe Dominguez, Constellation president and CEO. "Frustratingly, nuclear energy was excluded from many corporate and government sustainable energy procurements. Not anymore."
"The United States government joins Microsoft and other entities to support continued investment in reliable nuclear energy that will allow Constellation to relicense and extend the lives of these critical assets."

Constellation’s Role in the Nuclear Industry

Constellation says it generates 10 percent of the nation’s carbon pollution-free energy. A majority of its output is nuclear energy, but it also produces hydro, wind, and solar power.

Goals for a Carbon-Free Future

The company has set a goal of reaching 100 percent carbon-free electricity by 2040.
Today, Constellation already generates close to 90 percent of its electricity from carbon-free sources.

Implications of the Contract

The contract will allow Constellation to extend licenses for existing nuclear power plants as well as "invest in new equipment and technology" that should result in 135 megawatts of additional capacity. The GSA agreed to purchase 2.4 million megawatt-hours of electricity from that added capacity over 10 years.

Industry Trends

The deal also extends to 13 other agencies, including the departments of Veterans Affairs and Transportation as well as the Federal Bureau of Prisons, the National Park Service, the Social Security Administration, and the US Mint.

The Growing Importance of Clean Energy Sources

The GSA is framing the contract as a way to lock in more affordable prices as data centers drive up electricity demand and increase competition for limited clean energy sources:

"In the face of uncertainty over future electricity prices and increasing electricity demand from data centers and AI facilities, for instance, this contract provides federal agencies with budgetary stability and protections from future price increases by keeping their electricity costs fixed for 10 years."
"While also continuing to bolster the domestic nuclear industry."

Industry Trends

Google, Meta, Amazon, and Microsoft have all inked splashy nuclear energy deals over the past year. In September of last year, Microsoft and Constellation announced a plan to restart a shuttered reactor at Three Mile Island in Pennsylvania.

Government Support for Nuclear Energy

The Biden administration has made nuclear energy a key part of its plan to transition the US away from fossil fuels to energy sources that don’t cause climate change.
Last October, the Department of Energy announced a $1.52 billion loan to help restart a retired nuclear generating station in Covert Township, Michigan.
The Trump campaign agenda included efforts to "support nuclear energy production."

Conclusion

The GSA’s major nuclear energy contract is a significant development for the industry, and it comes at a time when many tech companies are making similar deals. As the demand for clean energy sources continues to grow, this contract will provide federal agencies with budgetary stability and protections from future price increases.

Industry Outlook

As the demand for clean energy sources continues to grow, the nuclear industry is likely to play an increasingly important role in meeting that demand. The GSA’s contract is a significant step forward for the industry, and it sets a precedent for other government agencies to follow.

Additional Quotes from Key Figures

"This historic procurement locks in a cost-competitive, reliable supply of nuclear energy," said GSA administrator Robin Carnahan. "We’re demonstrating how the federal government can join major corporate clean energy buyers in spurring new nuclear energy capacity and ensuring a reliable, affordable supply of clean energy for everyone."